Thai food industry poised for big growth
THAIFEX exhibitors counting on value added, organic and Halal products for growth

Thai food exports are slated to hit US $7.34 billion in 2003, an increase of 8.2% from 2002, said the country's vice-minister of commerce, speaking at the Thailand International Food Exhibition 2003, one of South East Asia's largest food exhibitions.

"Thailand's agricultural industry has and will always be one of the most important priorities of the government," said Piyabutr Cholvijarn. "The vast variety of our food products has supported well our aim for Thailand to become the kitchen of the world."

THAIFEX, and THAIMEX, (a Muslim food exhibition held at the same time), have been on a steady growth pattern for the last three years. This year the fairs, organized by the country's Department of Export Promotion, were held between May 28th and June 1rst, with the number of exhibitors shooting up from 734 in 2000, to 841, from 426 companies in a variety of sectors.

Thailand has a strong domestic agriculture production sector, which employs close to 60% of the country's workforce and accounts for 14% of its GDP. Exports are traditionally centered on commodities such as rice, produce and seafood, and products typically associated with Thai cuisine such as Durion and Mangosteen.

"There's no doubt about it, demand for Thai food in Canada is growing," said Dan On, president of Dan-D-Foods, which imports and distributes a variety of Thai products including Rice Jasmin, Rice Snacks and dehydrated products such as Papaya, Pineapple and Mangos.

"Many Canadians come here on vacation each year, they try the food they like it, and then they look for it when they get back home," said On.

Demand for Thai food has also been spurred by an explosion in the construction of Thai restaurants around the world. These are expected to jump from 5,000 last year to 8,000 in 2005. These include at least 30, in the greater Toronto area.

Although the food service industry has been a traditional rival of grocery distribution, in the case of Thai food, the restaurants are spurring demand by introducing consumers to various dishes, which consumers then try to cook at home, using products from their local supermarket.

In recent years Thailand's agriculture economy has shifted, from being a low cost commodities producer, with businesses slowly moving up the food chain. Wage rates at the plants we visited averaged $0.60 an hour, but in recent years Thailand has been seeing increased competition from lower cost competitors such as Vietnam, Cambodia and China.

A typical exemplar of this trend is the Preserved Food Specialty Co., which operates a dehydrated food processing plant just outside Bangkok. The company was founded a decade ago by Worapas Mahattanobol, then a government employee, who saw an opportunity to package bulk goods for export such as dried shrimp, corn and beans.

But this year the company decided to move up the value chain by offering a line of TomYanKoong dried soup products, such as Tom Kha Khai, Green Curry and Kang Lieng Egg soup, which it packages under its own brand name and under private label.

Despite the increasing popularity of Thai food, much that is brought into Canada is sold through brokers as opposed to being bought directly from the factory. But according to one key distributor, demand is increasing.

"The quality is very good, and pricing is competitive," said Ron Rosen, a buyer with I. Magid Inc., which imports and distributes a variety of products such as canned shrimp, crab meat, and tropical fruit, to independent grocers, supermarkets and dollar stores. "Thailand has been around for a long time and their products have a long track record of credibility which some of their direct competitors are still trying to build."

Thailand's balance between quality and economical production is also giving it the edge in prepared foods not normally associated with Thai cuisine such as prepared pizza says another importer.

"They have no obvious natural competitive advantages when it comes to making frozen pizzas. But they make them cheaper than we do in Canada, even though they have to ship the pizzas half way around the world," said one importer who asked not to be identified, to protect his dealings with local suppliers. "We have already signed several contracts, and should starting shipments to some of the major retailers this fall."

Another big trend in recent years has been Thailand's emergence as one of the biggest Halal food suppliers in the world. The country has a significant Muslim population in its southern regions and has gone to great lengths to build on this base.

For example the Preserved Food Specialty Co. routinely gets its products certified by the Central Islamic Committee of Thailand. This certification is crucial to marketing these products to the more than one billion muslims around the world, including Canada's growing community.

Thailand also has the perfect balance of resources to produce organic food says one frozen foods processor.

"Our clients are asking us more and more for organic and GMO free products. They worry about the independence of certifications auditors in competitor countries," said Chotiroj Wongwan, managing director of Lanna Agro Industry Co., who both owns and runs the plant, which freezes and packages a variety fruits and vegetables. "Thailand has built a long track record. Clients know they can trust our quality and certification."

Although Thai food exports have been on a long-term up-trend, both THAIFEX, and THAIMEX, have suffered from the SARS scare, with attendance down from last year according to Thai trade officials. Ironically, the Canadian delegation was also reduced, which is unusual since Canada has been plagued with SARS difficulties, and Thailand is largely SARS free.

For additional information:

Lanna Agro Industry:
Thaifex 2003 & Thaimex 2003:
I Magid:




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